Estimated 35,000 property transactions in East hit by down valuations
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London-based estate agent Benham and Reeves estimate that almost 400,000 homes in the UK have been down valued in the past 12 months - with over 35,000 of those estimated to be in the East of England.
Benham and Reeves' research combines property market transactions with data from Bankrate's devaluation report to conclude that an estimated 390,285 homes across the UK have been down valued in the past year.
A down valuation occurs when a surveyor, acting on behalf of a lender, assesses a property and believes it to be worth significantly less than the price agreed by the seller and buyer. This can affect the amount the lender is willing to offer and may even result in the sale falling through.
Increasing housing prices are believed to have affected valuations, combined with expectant sellers setting higher asking prices - particularly as they try to take advantage of the current market, where demand continues to outstrip supply.
According to the UK house price index, 90,408 property transactions took place in the East of England over the past 12 months - the fourth highest region in the country.
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Yet Bankrate's devaluation report suggests that 35,259 of these - around 39% - were down valued.
According to the study, it's estimated that the average property across the UK will take a hit of between £5,000 and £10,000 as a result, with a mid-range drop of £7,500 reducing the average property price by 2.8%.
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In the East of England, this would mean that the average property, listed at £327,017 according to the UK House Price Index, would be re-valued at £319,517, a 2.3% drop.
Marc von Grundherr, director of Benham and Reeves, said: "Down valuations can be a real thorn in the side of those eager to progress with a property transaction but unfortunately they are a prevalent occurrence within the UK property market.
"As a seller, you can look for a new buyer purchasing through a different lender and hope they agree on the value of your home. Or you can hold tight until values increase at the risk of losing your buyer or simply accept the lower value placed on your home.
"As a buyer, you can also negotiate with the seller or lower your offer, or you can get the property valued by a different surveyor and lender. Otherwise, you face getting a loan to cover the shortfall or bumping up your deposit to cover the cost.”
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